Lack of Transparency, Agency Oversight, Threatens CMS Uncompetitive Bidding Program

Editor’s Note:   Over two years ago, the Chief of the Congressional Budget Office (CBO) explained that the result of CMS’ bidding program is not a competitive price but one that is “Fundamentally…an arbitrary number.”  The CBO official further explained that the program is not transparent, just the opposite: “the bidding mechanism… doesn’t reveal the…market clearing prices.  And the next point is, I think, the probability of failure in a subsequent round of bidding is very high because mechanisms they use aren’t actually designed to reveal those prices.”

 As CMS expands it uncompetitive bidding program, a program described by Nobel laureates and 240 other leading academicians as the “antithesis of science,” the program’s problems mount.  Almost one-third of all “winning” bidders in Tennessee have been disqualified following an independent investigation because CMS didn’t bother to find out that the bidder weren’t even licensed by the state to provide the medical services and supplies.  CRE has long asserted that CMS’ secret process for determining bona fide bidders was inappropriately hidden from public scrutiny. 

Based on the Tennessee experience, it appears that the process CMS has kept secret may not even exist at all, at least as an effective program.  Despite, the program’s threat to the health of diabetic patients on other Medicare beneficiaries who rely on home medical supplies and services to maintain their independence, CMS claims “transparency” and hope they can continue to keep the public from peering behind the competitive bidding curtain.

From:  Healthcare Matters

The CMS Competitive Bidding Program Will Save Billions

Thomas Finn

Pricing transparency remains a huge issue in healthcare, but not so much in the halls of Congress. At least, not when it comes to the behavior of congressmen who continue to push against the Centers for Medicare & Medicaid Services’ (CMS) mandate to competitively bid its demand for durable medical goods and services.

Thank goodness for Marilyn Tavenner, Obama’s choice to lead the CMS Competitive Bidding Program. She is standing her ground. “Competitive bidding is working, is saving taxpayers and beneficiaries billions of dollars, and ends unnecessarily high payments for common purchases like wheelchairs, diabetic testing strips, and oxygen equipment,” said a spokesperson for CMS. “We remain confident that seniors will have access to their equipment, savings will continue, and we have no plans for delay.”

The Medicare Modernization Act of 2003 was signed into law by then President George W. Bush. Competitive bidding was its centerpiece. Although it was supposed to launch in 2008, Congressional delay tactics prevented the program from getting off the ground until 2011. Companies like Abbott, J&J and Roche have a lot to lose. So is it remarkable that they’ve actually been successful stalling the program’s implementation?

For readers of this blog, the CMS argument is obvious. It knows that it’s been overpaying for things like walkers, canes and wheelchairs. It understood that if it competitively bid its demand, it would save ridiculous sums of money –billions. And the suppliers knew it too, so they’ve been lobbying Congress to protect their gravy train. The latest stall tactic is a letter signed by more than 200 members of Congress which makes a claim that the CMS bidding process is being “mishandled” because, among other things, it lacks proper transparency.

Clearly, the signers of that letter don’t have that problem.

July 1 marked the expansion of the CMS Competitive Bidding Program. Against the odds, it continues to move in the right direction –slow but much more sure footed given the savings results of its pilot ($202 million). What that date means to many of us is that it’s now official, we may have to get our diabetes testing strips from a new supplier.